STOCK DIVIDEND FUND, INC.
Ticker Symbol: SDIVX
PROSPECTUS
February 21, 2024
INVESTMENT OBJECTIVE:
Growth and Income
10670 N. Central Expressway
Suite #470
Dallas, Texas 75231
For Information, Shareholder Services and Requests:
Toll Free 1-800-704-6072
For online Prospectus, Statement of Additional Information and
Reports to Shareholders: www.funddocuments.com
The Securities and Exchange Commission has not approved or disapproved of
these securities, nor has the Commission determined that this Prospectus is
complete or accurate. Any representation to the contrary is a criminal
offense.
TABLE OF CONTENTS
FUND SUMMARY 3
Investment Objective 3
Fees and Expenses 3
Principal Investment Strategies 4
Portfolio Turnover 5
Principal Investment Risks 5
Performance 6
Investment Advisor and Portfolio Manager 7
Purchase and Sale of Fund Shares 7
Tax information 7
MANAGEMENT, ORGANIZATION, AND CAPITAL STRUCTURE 7
Contract Terms 8
PORTFOLIO MANAGER 8
Custody of Investments 8
Legal Proceedings 9
CAPITAL STOCK 9
Description of Common Stock 9
Voting Rights 9
PRICING OF FUND SHARES 9
Market Value of Securities 9
PURCHASE OF FUND SHARES 10
Initial Investments 10
Subsequent Purchases 10
Fractional Shares 10
Purchasing Shares from Broker-dealers and Others 10
OFFICERS AND DIRECTORS OF THE FUND 11
Management Ownership 11
IRA ACCOUNTS 11
PENSION, PROFIT SHARING AND 401K PLANS 11
REDEMPTION OF FUND SHARES 11
Endorsement Requirements 12
Redemption Price 12
FREQUENT PURCHASE AND REDEMPTION OF FUND SHARES 12
DIVIDENDS AND DISTRIBUTIONS 13
Reinvestments 13
TAX CONSEQUENCES 13
Tax Distribution 13
Federal Withholding 13
Financial Highlights 14
PRIVACY POLICY 16
FOR MORE INFORMATION Cover
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FUND SUMMARY
Investment Objective: The investment objective of the Fund is growth and
income. This is a fundamental objective and cannot be changed.
Fees and Expenses: The following table describes the fees and expenses that
you may pay if you buy and hold shares of the Fund.
Shareholder Fees (fees paid directly from your investment):
Maximum Sales Charge (Load) Imposed on Purchases None
Redemption Fee on purchases held less than one year 2.00%
Annual Fund Operating Expenses (Expenses that are deducted from Fund assets):
Management Fees* 0.85%
Distribution (12b-1) Fees None
Other Expenses** 0.00%
Total Annual Fund Operating Expenses 0.85%
* The Investment Advisor has contractually agreed to pay all operating
expenses of the Fund except brokerage, interest, taxes, extraordinary legal
and other extraordinary expenses. This agreement is renewed annually and may
be terminated at any time upon 60 days prior written notice, without payment
of penalty, by the Fund?s Board of Directors or by a vote of the majority of
outstanding voting shares of the Fund.
** The Fund does not expect to incur any ?Other Expenses?.
Example: This example is intended to help you compare the cost of investing
in the Fund with the cost of investing in other mutual funds. The example
assumes that you invest $10,000 in the Fund for the time periods indicated
and then redeem all of your shares at the end of those periods. The example
also assumes that your investment has a 5% return each year and that the
operating expenses of the Fund remain the same. Based on these assumptions
your costs would be:
One Year Three Years Five Years Ten Years
$87 $271 $471 $1,049
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Principal Investment Strategies: The Fund will attempt to achieve its
objective by investing primarily in dividend paying common stocks. The
Investment Advisor of the Fund uses quantitative analysis (mathematical
models using metrics such as free cash flow, book value, pension liabilities,
cash per share, debt levels, etc.) to identify dividend paying common stocks
that generally have investment grade credit ratings on outstanding debt (or
equivalent quality if not rated by larger credit rating agencies such as
Moody?s or Standard and Poors), a long history of dividend payments (at least
ten years), minimum ratios of expected earnings to dividend strength, and
expectation by the Advisor that the dividend may be increased in the future.
The Fund will invest at least 80% of its net assets in larger capitalization
dividend paying common stocks of U.S. issuers and intends to be as fully
invested as possible at all times. Larger capitalization stocks are those
that have a value of $5 billion and higher as determined by calculating
number of shares outstanding multiplied by current share price. This is not a
fundamental policy and shareholders will be given at least 60 days prior
notice if there is any change in the 80% investment policy. Our Investment
Strategy may at times produce a portfolio that has overweighted risk to a
certain Sector, versus a fully diversified fund.
Portfolio Turnover Policy: The Fund pays transaction costs, such as
commissions, when it buys and sells securities (or ?turns over? its
portfolio). A higher portfolio turnover rate may indicate higher transaction
costs and may result in higher taxes when Fund shares are held in a taxable
account. These costs, which are not reflected in annual fund operating
expenses or in the example, affect the Fund?s performance. During the most
recent fiscal year, the Fund?s portfolio turnover rate was 41.34% of the
average value of its portfolio. The Investment Advisor will attempt to keep
turnover to a minimum.
Principal Investment Risks: An investor could lose money in this Fund. The
principal risks of investing in this Fund are:
a) changing stock market and economic conditions may cause total returns to
go down over short and even long periods of time.
b) the investment strategies may not prove to be effective.
c) periods of declining stock market prices may cause investing in common
stock securities by the public to fall out of favor, thereby causing the
Fund to underperform or lose money.
d) changes in the tax treatment on stock dividends may adversely affect the
value of dividend paying stocks.
e) The Fund invests mainly in U.S. larger capitalization stocks which may
underperform other stock categories such as small and international.
Non-Diversification risk: The Fund is non-diversified which means that it may
invest a relatively high percentage of its assets in a limited number of
securities. As a result, the performance of the Fund may be more subject to
the moves of an individual company. The Fund seeks only enough
diversification in securities selection to maintain Federal non-taxable
status under Sub-Chapter M of the Internal Revenue Code. See section ?Tax
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consequences? of this prospectus for information about requirements for Sub-
Chapter M for the Fund.
Who should invest: This Fund is best suited for disciplined long-term
investors who want to invest in a portfolio of dividend paying companies for
growth and income.
Who should not invest: This Fund is not recommended for investors who are
short term oriented and not tolerant of daily price fluctuations.
Performance:
Risk/Return Bar Chart and Performance Table: The bar chart and table below
provide an indication of the risks of investing in Stock Dividend Fund. The
chart shows the changes in the Fund?s performance since inception. The table
compares the Fund?s returns to a relative comparison benchmark. After-tax
returns are calculated using historical highest federal tax rates and do not
reflect the impact of state and local taxes. Actual after-tax returns depend
on an individual investor?s tax situation and may differ from those shown.
After-tax returns are not relevant to investors who hold Fund shares through
tax-deferred accounts such as 401(k) plans or IRA?s. Past results are not an
indication of future performance.
Annual Percentage Returns
-30% -20% -10% 0% 10% 20% 30%
2004* 0.68% X
2005 6.65% X
2006 21.19% X
2007 5.14% X
2008 (35.96)% X
2009 18.51% X
2010 18.43% X
2011 8.09% X
2012 13.80% X
2013 28.25% X
2014 (2.62)% X
2015 (16.79)% X
2016 36.37% X
2017 23.07% X
2018 (5.77)% X
2019 16.22% X
2020 (1.51)% X
2021 22.78% X
2022 0.67% X
2023 4.56% X
*Beginning operations December 27, 2004 through December 31, 2004.
During the entire period shown in the chart above, the highest return for a
calendar quarter was 16.95% while the lowest return for a quarter was
(28.31)%. These returns occurred in quarters ending September 30, 2009 and
December 31, 2008, respectively.
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Average Annual Total Returns
for the Year ended December 31, 2023
1 Year 5 Year 10 Year
Stock Dividend Fund
Return Before Taxes 4.56% 8.14% 6.59%
Return After Taxes on Distributions 1.24% 6.08% 5.07%
Return After Taxes on Distributions 0.47% 6.51% 5.33%
And Sale of Fund Shares
S&P 500 Index** 26.29% 15.67% 12.01%
**Includes dividend reinvestment compounding and no deduction for fees,
expenses or taxes)
Investment Advisor and Portfolio Manager: Adams Asset Advisors, LLC is the
investment advisor to the Fund. Steven Adams owns Adams Asset Advisors, LLC
and has also been the portfolio manager of the Fund since inception. Mr.
Adams is responsible for day-to-day operation of the Fund. See the
?MANAGEMENT, ORGANIZATION AND CAPITAL STRUCTURE? section of this prospectus
for additional information.
Purchase and Sale of Fund Shares: Initial purchases of Fund shares are
subject to a $100,000 minimum and must be made through a brokerage firm or
other financial institution that has agreed to facilitate purchase of the
shares. Currently, the only firm with such an agreement is Fidelity
Investments. The account must be opened through Adams Asset Advisors, LLC,
the Advisor to the Fund. Fidelity Investments charges a small transaction
fee for each purchase order. See the ?PURCHASE OF FUND SHARES? section of
this prospectus for additional information. Redemption requests must be made
through Fidelity Investments or Adams Asset Advisors, LLC. The Fund imposes
a 2% redemption fee for shares held less than one year. For additional
information see the ?REDEMPTION OF FUND SHARES? section of this prospectus.
Tax Information: Dividends and capital gain distributions that you receive
from the Fund, whether reinvested in Fund shares or paid in cash, are taxable
to you at either ordinary income or capital gains rates unless you are
investing through a tax-free plan. See ?TAX INFORMATION? section of this
prospectus for additional information.
MANAGEMENT, ORGANIZATION AND CAPITAL STRUCTURE
Management
Investment Advisor: Adams Asset Advisors, LLC (?the Advisor?) is a Texas
Limited Liability Corporation, an SEC registered investment advisor and is
the Investment Advisor to the Fund. The Advisor was founded in March of 2002
and is an advisor to one other SEC registered investment company. The
address of Adams Asset Advisors, LLC is: 10670 N. Central Expressway #470,
Dallas, TX, 75231. Laura S. Adams is a Member of the Investment Advisor and
is also President of the Fund. Steven Adams, Laura?s husband, is portfolio
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manager of the Fund. Mr. Adams has a BSME from U.T. Austin and MBA from
Dartmouth?s Tuck School. Prior to joining Adams Asset Advisors, LLC in March
2005, Mr. Adams worked as a Private Wealth Advisor at Goldman Sachs for over
10 years and then at Merrill Lynch as Senior Vice President, Investments for
over 7 years.
The Investment Advisor will provide the following services to the Fund:
1. Continuous review of the portfolio.
2. Recommend to the Fund when and to what extent which securities the Fund
should purchase or sell according to the Fund?s investment methodology.
3. Pay the salaries of Fund employees who may be officers or directors or
employees of the Investment Advisor. There are currently no salaried
employees of the Fund and none are contemplated at this time.
4. Pay all operating expenses of the Fund, except brokerage fees and
commissions, taxes, interest, extraordinary legal and other extraordinary
expenses.
5. Be the transfer agent of the Fund by handling all share purchases and
redemptions.
On April 19, 2004 the Directors of the Fund approved an advisory contract
with the Advisor. This Agreement will continue on a year to year basis
provided that approval is voted on at least annually by specific approval of
the Board of Directors of the Fund or by vote of the holders of a majority of
the outstanding voting securities of the Fund. In either event, it must also
be approved by a majority of Directors of the Fund who are neither parties to
the agreement or interested persons as defined in the Investment Company Act
of 1940 at a meeting called for the purpose of voting on such approval.
Contract Terms: Under the Agreement, the Advisor will furnish investment
direction on the basis of an ongoing review using the appropriate methodology
to determine when and what securities will be purchased or disposed by
designated Fund personnel. The Agreement may be terminated at any time,
without payment of penalty, by the Board of Directors or by vote of a
majority of the outstanding voting securities of the Fund on not more than 60
days written notice to the Advisor. In the event of its assignment, the
Agreement will terminate automatically. Ultimate decisions as to the
investment policy and as to individual purchases and sales of securities are
made by the Officers and Directors of the Fund. For these services, the Fund
has agreed to pay a fee of 0.85% per year on the net assets of the Fund.
This fee is computed daily based on the last calculation of net asset value
of the Fund and is payable monthly.
The Advisor is required to follow the investment strategy of the Fund in
managing the portfolio. The Advisor paid the initial organizational costs of
the Fund. The Advisor is a registered transfer agent and will provide
transfer agent services to the Fund as described in the Statement of
Additional Information (SAI). The Advisor is currently registered as an
investment advisor with the SEC.
A discussion regarding the basis for the Board of Director's approval of the
Agreement between the Fund and the Adviser is available in the Fund's Annual
Report to Shareholders.
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PORTFOLIO MANAGER
Steven Adams is Managing Member of the Investment Advisor and also Portfolio
Manager of the Fund. Mr. Adams has a BSME from U.T. Austin and an MBA from
Dartmouth?s Tuck School and joined Adams Asset Advisors, LLC full time in
March 2005. Mr. Adams was previously a Senior Vice President, Investments at
Merrill Lynch for over seven years and a Private Wealth Advisor at Goldman
Sachs for over ten years, managing a Goldman Sachs Private Wealth office for
four of those years. The Fund?s SAI (Statement of Additional Information)
provides additional information about the Portfolio Manager, including
compensation, Fund Share ownership, and other portfolios managed.
Custody of Investments: The Fund will operate under Rule 17f(2) and its
amendments under the Investment Company Act of 1940. Securities and similar
investments of the Fund will be maintained with an entity whose functions and
physical facilities are supervised by Federal or State authority. The Fund
will maintain Fidelity Bond coverage in an amount sufficient to insure
custodial activities.
Legal Proceedings: As of the date of this Prospectus, there was no pending or
threatened litigation involving the Fund or the Investment Advisor.
CAPITAL STOCK
Description of Common Stock: The authorized capitalization of the Fund
consists of 100,000,000 shares of Stock Dividend Fund, Inc. common stock of
$0.001 par value per share. Each share has equal dividend, distribution and
liquidation rights. There are no conversion or preemptive rights applicable
to any shares of the Fund. All shares once issued in book format (no
certificates) are fully paid and non-assessable.
Voting Rights: Each holder of Fund shares has voting rights equal to the
number of shares held. Voting rights are non-cumulative. Therefore, the
holders of a majority of shares of common stock can elect all directors of
the Fund if they so choose, although holders of remaining shares are still
able to cast their votes.
PRICING OF FUND SHARES
When and How do We Price: At a minimum, the Fund is priced on any day that
there is a request for redemption or purchase of Fund shares when the New
York Stock Exchange is open, and also on the last day of the month. The net
asset value of the Fund is determined after 4:15 p.m. using the closing
prices (presently 4:00 p.m.) for common stock securities on days that the New
York Stock Exchange is open. For options securities, the last offered price
will be used from major pricing services based on the closing time of the
Chicago Board Options Exchange (presently 4:15 p.m.) The net asset value is
the price of each share and is determined by dividing the value of Fund owned
securities, plus any cash and other assets less all liabilities, by the
number of shares outstanding. All Fund price calculations will be carried to
two decimal places.
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Market Value of Securities: Last sale prices will be used to price securities
that are listed on a national exchange or over-the-counter market. Securities
that have not recently traded are valued at the last bid price in such
market. Securities for which current market quotations are not readily
available will be valued at fair value as determined in good faith by the
Fund?s Board of Directors.
Fair Value Pricing. Fair Value pricing will be used only when market prices
are unavailable. As an example, if trading is halted on one of the Fund?s
portfolio securities while market prices are available for other securities,
the Board will determine a fair value for that holding so that the NAV can be
calculated for the Fund.
PURCHASE OF FUND SHARES
The offering price of shares offered by the Fund is at the net asset value
per share next determined after receipt of the purchase order by the Fund and
is computed in the manner described in the above section ?Pricing of Fund
Shares?. Purchase orders must be received prior to the close of the New York
Stock Exchange (presently 4:00 p.m.) in order to receive the net asset value
pricing for that day. Otherwise, the offering price for the order will be at
the next calculation of net asset value. The Fund reserves the right, at its
sole discretion, to terminate the offering of shares made by this Prospectus
at any time and to reject purchase applications when, in the judgement of
management such termination or rejection is in the best interest of the Fund.
Initial Investments: Initial purchase of shares of the Fund must be made
through a brokerage firm or other financial institution that has agreed to
facilitate purchase of the shares. Currently, the only firm with such an
agreement is Fidelity Investments. The account must be opened through Adams
Asset Advisors, LLC, the Advisor to the Fund. Fidelity Investments charges a
small transaction fee for each purchase order. To receive a prospectus and
Fidelity Investments account application please call 1-800-704-6072 or write
to: Stock Dividend Fund, Inc., 10670 N. Central Expressway #470, Dallas, TX
75231.
The minimum initial purchase of shares, unless waived by the Fund, is
$100,000, which is due on the next business day after purchase date.
Subsequent Purchases: Subsequent purchases may be made by mail or phone
through the Fidelity Investments account and funds are due the next business
day after purchase date. The minimum is $100 and Fidelity transaction costs
apply.
Fractional Shares: Fractional shares to three decimal places are offered by
the Fund.
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Purchasing Shares from Broker-dealers, Financial Institutions
and Others
Some broker-dealers may sell shares of the Fund. Broker-dealers may charge
investors a fee either at the time of purchase or redemption. The fee, if
charged, is retained by the broker-dealer and not remitted to the Fund or the
Advisor.
The Fund may enter into agreements with broker-dealers, financial
institutions or other service providers (?Servicing Agents?) that may include
the Fund as an investment alternative in the programs they offer or
administer. Servicing Agents may:
1. Become shareholders of record of the Fund. This means all requests to
purchase additional shares and all redemption requests must be sent
through the Servicing Agent. This also means that purchases made through
Servicing Agents may not be subject to the minimum purchase requirements
of the Fund.
2. Use procedures and impose restrictions that may be in addition to, or
different from, those applicable to investors purchasing shares as
previously described.
3. Charge fees to their customers for the services they provide them.
If you decide to purchase shares through Service Agents, please carefully
review the program materials provided to you by the Servicing Agent.
Purchases and redemptions will be affected at the net asset value next
calculated after receipt of a tender by the Service Agent.
OFFICERS AND DIRECTORS OF THE FUND
Management Ownership: Directors and Officers of the Fund and their
ownership:
Fund Shares Owned Dollar Range of Percent of
Name as of 12/31/23 Ownership as of 12/31/23 Class
Laura S. Adams 115,757 >$1,000,000 9.75%
President & Director*
Steven Adams 115,757 >$1,000,000 9.75%
Portfolio Manager*
Jennifer T. Lapeyre 0 $ 0-$ 10,000 0.00%
Director
Vicky L. Hubbard 0 $ 0- $ 10,000 0.00%
Director
*Laura S. Adams, President and an ?interested? Director of the Fund and her
husband, Steven Adams, Portfolio Manager of the Fund, control these shares
through family related accounts.
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IRA ACCOUNTS
Shares may be purchased for an Individual Retirement Account (?IRA?),
including simple IRA?s, Roth IRA?s, and SEP?s. All IRA type investments must
be made as described in ?PURCHASE OF FUND SHARES?, ?Initial Investments?.
PENSION, PROFIT SHARING AND 401K PLANS
Purchase of Fund shares through business retirement plans is available to the
owners, officers and employees who participate in the retirement plans. The
accounts must be opened with Fidelity Investments as previously described
under ?Initial Investments?.
REDEMPTION OF FUND SHARES
The Fund assesses a 2.00% early redemption fee for shares held less than one
year. The ?first-in, first-out? method is used to determine the holding
period by comparing the date of the redemption with the earliest dates of the
share purchased. Any fees assessed due to early redemption are retained by
the Fund. The Fund reserves the right to waive the redemption fee if
management concludes that the original purchase was made in good faith.
Endorsement Requirements: The Fund will only issue book entry shares and will
redeem pursuant to a shareholder request all or any part of the shares of any
shareholder that tenders a request for redemption. The brokerage firm or
advisor that places your order may require a properly guaranteed endorsement,
also known as a signature guarantee, from an eligible guarantor institution.
A signature guarantee is an assurance by the above mentioned financial
institution that a signature and person who signed the signature are the same
individual.
Redemption Price: The redemption price is the net asset value per share next
determined after notice is received by the Fund for redemption of shares.
The Fund must receive notice prior to the closing of the New York Stock
Exchange (presently 4:00 p.m.) in order to receive pricing at the net asset
value on that day. Otherwise, redemption will be done at the next
calculation of Fund net asset value. The proceeds received by the shareholder
may be more or less than his/her cost of such shares, depending upon the net
asset value per share at the time of redemption and the difference should be
treated by the shareholder as a capital gain or loss for federal and state
income tax purposes.
Redemption Payment: Payment by the Fund will be made within four business
days after redemption, regardless of whether markets are stressed or non-
stressed, as the Fund holds only highly liquid securities. However, the Fund
may suspend the right of redemption or postpone the date of payment if: The
New York Stock Exchange is closed for other than customary weekend or holiday
closings, or when trading on the New York Stock Exchange is restricted as
determined by the Securities and Exchange Commission or when the Securities
and Exchange Commission has determined that an emergency exists, making
disposal of fund securities or valuation of net assets not reasonably
practicable. The Fund intends to make payments in cash, however, the Fund
reserves the right to make payments in kind. It should be noted that
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shareholders will incur brokerage costs when selling the securities received
as part of an in kind distribution and also may incur potential tax
liabilities. Shareholders would also have continuing market risk by holding
these securities. The Fund does not intend to issue in kind redemptions
using illiquid securities.
FREQUENT PURCHASES AND REDEMPTION OF FUND SHARES
The Fund is not intended to provide a means of speculating on short-term
market movements. Frequent short-term trading by investors has the potential
to make the Fund more difficult to manage efficiently, cause increased
brokerage commissions, create unplanned tax burdens for some shareholders,
and may dilute the value of Fund shares for long-term investors. The Fund
does not have, and will not have, any arrangements with any person or entity
to permit frequent purchases or redemptions of shares. The Fund reserves the
right to reject any purchase at any time, and will exercise this right at the
first signs of any ?market timing? activities by any shareholder.
DIVIDENDS AND DISTRIBUTIONS
Reinvestments: The Fund will automatically use the taxable dividend and
capital gains distributions for purchase of additional shares for the
shareholders at net asset value as of the close of business on the
distribution date.
Cash Payouts: A shareholder may, at any time, by letter or forms supplied by
the Fund direct the Fund to pay dividend and/or capital gains distribution,
if any to such shareholder in cash.
TAX CONSEQUENCES
Under provisions of Sub-Chapter M of the Internal Revenue Code of 1986 as
amended, the Fund, by paying out substantially all of its investment income
and realized capital gains and meeting certain other tests, intends to be
relieved of federal income tax on the amounts distributed to shareholders.
Not qualifying under Subchapter M of the Internal Revenue Code would cause
the Fund to be considered a personal holding company subject to normal
corporate income taxes. This would reduce the value of shareholder holdings
by the amount of taxes paid. Any subsequent dividend distribution of earnings
of the Fund after taxes would still be taxable as received by shareholders.
Tax Distribution: Fund distributions (capital gains & dividend income),
whether received by shareholders in cash or reinvested in additional shares
of the Fund, may be subject to federal income tax payable by shareholders.
Distribution of any long-term capital gains realized by the Fund will be
taxable to the shareholder as long-term capital gains, regardless of the
length of time Fund shares have been held by the investor. All income
realized by the Fund, including short-term capital gains, will be taxable to
the shareholder as ordinary income, except for amounts designated as
?qualified dividends? on form 1099-Div. Dividends from net income will be
made during the year at the discretion of the Board of Directors. Dividends
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received shortly after purchase of Fund shares by an investor will have the
effect of reducing the per share net asset value of his/her shares by the
amount of such dividends or distributions. This may be considered a return
of capital, but the dividend is still subject to federal income and state
taxes.
Federal Withholding: The Fund is required by federal law to withhold 30% of
reportable payments (which may include dividends, capital gains,
distributions and redemptions) paid to shareholders who have not complied
with IRS regulation. In order to avoid this withholding requirement, you must
certify on a W-9 tax form that your Social Security or Taxpayer
Identification Number provided is correct and that you are not currently
subject to back-up withholding.
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STOCK DIVIDEND FUND, INC.
FINANCIAL HIGHLIGHTS
PER SHARE DATA AND RATIOS FOR A SHARE OUTSTANDING THROUGHOUT EACH YEAR
ENDED:
YEAR YEAR YEAR YEAR YEAR
ENDED ENDED ENDED ENDED ENDED
2023 2022 2021 2020 2019
------ ------ ------ ------ ------
Net asset value,
beginning of year $26.67 $27.92 $27.67 $28.98 $26.01
------ ------ ------ ------ ------
Income (loss)from investment
operations:
Net investment income 0.87 0.84 0.86 0.83 0.76
Net realized and
unrealized gain
(loss)on investments 0.06 (0.67) 5.41 (1.28) 3.46
---- ------ ----- ----- -----
Total from
investment operations 0.93 0.17 6.27 (0.45) 4.22
---- ------ ----- ----- -----
Less distributions from:
Net investment income (0.91) (0.85) (0.86) (0.83) (0.76)
Net realized gains (3.12) (0.57) (5.16) (0.03) (0.49)
------ ------ ------ ------ ------
Total distributions (4.03) (1.42) (6.02) (0.86) (1.25)
------ ------ ------ ------ ------
Net asset value,
end of year $23.57 $26.67 $27.92 $27.67 $28.98
------ ------ ------ ------ ------
Total Return 4.56% 0.67% 22.78% (1.51)% 16.22%
Net assets, end of
year(in 1000's) $27,984 $31,846 $33,037 $28,482 $33,105
Ratio of expenses to
average net
assets(a) 0.86% 0.86% 0.85% 0.87% 0.85%
Ratio of net investment
income to average net
assets 3.54% 2.97% 2.63% 3.15% 2.74%
Portfolio turnover
rate (annualized) 41.34% 28.97% 38.45% 34.06% 14.41%
(a) The Fund's actual expenses are calculated daily at 0.85% of net
asset value (NAV).
The accompanying notes are an integral part of these financial statements
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PRIVACY POLICY
Regulation S-P: The U.S. Securities and Exchange Commission has adopted a
regulation regarding the ?Privacy of Consumer Financial Information? known as
Regulation S-P. This regulation states that financial institutions such as
the Fund must provide the shareholder with this notice of the Fund?s privacy
policies and practices on an annual basis. The following items (A & B)
detail the Fund?s policies and practices:
A. Information We Collect - Information we receive from you on application or
forms include; your name, address, social security number or tax ID
number, W9 status, phone number and citizenship status. Information about
your transactions with us include; your account number, account balances
and transaction histories.
B. Disclosure Statement - We only disclose personal information about any
current or former shareholder of the Fund as required by law. And, since
we handle regular transactions internally the number of employees that
even see your information is limited. We also require all of the Fund?s
brokers, and our Investment Advisor that acts as the Fund's transfer agent
to adopt the regulations of Regulation S-P, as specified above by the
Fund.
FOR MORE INFORMATION
Several additional sources of
information are available to you:
The Statement of Additional
Information (SAI), incorporated
into this Prospectus by reference,
contains additional and more
detailed information about the
Fund?s policies and operations.
Annual and semi-annual reports list
current Fund holdings, detailed
financial statements, and
discussion of market conditions and
strategies that significantly
affected the Fund?s performance.
Call the Fund at 1-800-704-6072 or
write to the address below to
request free copies of the SAI and
the Fund?s annual and semi-annual
reports, or to request other
information about the Fund.
Documents are also available at
www.funddocuments.com.
You may also obtain information
about the Fund (including the
Statement of Additional Information
and other reports) from the
Securities and Exchange Commission
on their Internet site at
http://www.sec.gov, or at their
Public Reference Room in
Washington, D.C., or by calling the
Securities and Exchange Commission
at 1-202-551-8090, or by sending a
written request and duplicating fee
to the Public Reference Section of
the SEC, Washington, D.C. 20549-
0102. Email at [email protected]
PLEASE READ THIS PROSPECTUS
In this prospectus we present the
objectives, risks and strategy of
the Fund. Please keep it for future
reference.
STOCK DIVIDEND FUND, INC.
SEC file number: 811-21576
Fund Symbol: SDIVX
10670 N. Central Expressway
Suite 470
Dallas, Texas 75231
1-800-704-6072